Port makes $6.5m profit

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South Port at Bluff has announced a record after-tax profit of $6.5 million, despite handling less aluminium from the Tiwai Pt smelter in the past 12 months.

South Port chairman Rex Chapman said the company had diversified its trading base, which had offset the effects of a slowdown in production at the smelter.

Cargo handled at the port in the year to June totalled 2.51 million tonnes, down from the previous year's record volume of 2.69 million tonnes. But extra revenue from a second coolstore bought by the port and good profits from a range of other cargo had offset the decrease in cargo volume, he said.

The main reason cargo flows reduced was because the Tiwai aluminium smelter, one of the port's largest customers, continued to operate at 15 per cent below its normal capacity, so was producing less aluminium.

About 100,000 tonnes, or 56 per cent of the port's total reduction in volume, was related to lower smelter activity.

Lower tonnages of stock food and wood chips were shipped through the port at Bluff in the past year.

However, on the positive side, South Port chief executive Mark O'Connor said a record 387,000 tonnes of fertiliser was imported through the port last season, compared with 342,000 tonnes the previous year.

Log exports also increased from 198,000 tonnes in 2012 to 246,000 tonnes in the past financial year.

Two new log exporters, Highlander Forests and Forest Management, were active at South Port, moving logs into Asian markets.

Meanwhile, South Port and regional stakeholders continued to liaise with Shell New Zealand and remained optimistic about the energy potential available in the Great South Basin, Mr O'Connor said.

The Shell consortium is required to tell the Government whether it intends to commit to drilling or relinquish its licence before February next year.

"Hopefully, Shell will drill an exploration well and, if successful, there will be a production facility and that might lead to some activity for the port, but that's a 10-year time frame," Mr Chapman said.

South Port's after-tax profit of $6.5m in the year to June was an 8.5 per cent increase on the previous year and bettered the previous record profit of $6.26m in 2011.

The company announced a 22c a share total dividend to its shareholders for the year, compared with a 20c a share dividend the previous year.

Mr Chapman said the 2014 financial year was likely to throw up several challenges and South Port was forecasting a 5 per cent to 10 per cent reduction in profit.

Environment Southland is the 66 per cent majority shareholder of South Port and receives an annual dividend.